Here's how TransferWise has nearly quadrupled its revenue in two years, reaching $ 151 million

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TransferWise is developing a thriving business by reducing the prices of international money transfers. The 1,200-strong Estonian company generated $ 151 million in revenue over the past year, an increase of 75% over last year. Net income reached $ 8 million.

Co-founders Kristo Käärmann, 38, and Taavet Hinrikus, 37, founded the company in 2011. CEO Käärmann was frustrated after using HSBC to transfer money from the UK to his native Estonia. He saw 500 euros disappear in the transaction and realized that the bank had increased the exchange rate by about 5%. "I think it's a scandal," he said Forbes recently concerning such margins.

With TransferWise, Käärmann has created a peer-to-peer money transfer service in which people from the same country can withdraw money and pay for it. The service reduces the distance traveled by the money, which reduces costs. The average US money transfer fee to another country with TransferWise is 0.6%, compared to about 5% offered by banks. Low rates attracted three million customers.

The company has grown steadily by lowering its rates – it says it has lowered its prices 27 times last year – and by launching new products. In the spring, she released a "borderless account" debit card in the United States and Europe, which allows travelers to pay and be paid in different currencies. The initiative increased monthly payments from $ 2.8 billion in April 2018 to $ 4 billion four months later. "There has been a clear step forward" because of borderless accounts, says a TransferWise spokesperson.

In the money transfer business, improving the scale creates a competitive advantage. "TransferWise will get a lower exchange rate on a higher dollar value transaction," says Lindsay Davis, fintech analyst at CB Insights. "Instead of pocketing this money, they pass it on to customers to reduce costs. It's a gap for them. "

With its borderless debit card account, TransferWise is getting closer and closer to providing traditional financial services, such as account verification. "They said they were not trying to replace the bank account, but by issuing a debit card, of course," Davis says. "They will go to a highly saturated market if they do it."

TransferWise has leveraged $ 397 million in funding since 2011. "We do not expect to have an IPO or other outings now," says a TransferWise spokesperson.

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TransferWise is developing a thriving business by reducing the prices of international money transfers. The 1,200-strong Estonian company generated $ 151 million in revenue over the past year, an increase of 75% over last year. Net income reached $ 8 million.

Co-founders Kristo Käärmann, 38, and Taavet Hinrikus, 37, founded the company in 2011. CEO Käärmann was frustrated after using HSBC to transfer money from the UK to his native Estonia. He saw 500 euros disappear in the transaction and realized that the bank had increased the exchange rate by about 5%. "I think it's a scandal," he said Forbes recently concerning such margins.

With TransferWise, Käärmann has created a peer-to-peer money transfer service in which people from the same country can withdraw money and pay for it. The service reduces the distance traveled by the money, which reduces costs. The average US money transfer fee to another country with TransferWise is 0.6%, compared to about 5% offered by banks. Low rates attracted three million customers.

The company has grown steadily by lowering its rates – it says it has lowered its prices 27 times last year – and by launching new products. In the spring, she released a "borderless account" debit card in the United States and Europe, which allows travelers to pay and be paid in different currencies. The initiative increased monthly payments from $ 2.8 billion in April 2018 to $ 4 billion four months later. "There has been a clear step forward" because of borderless accounts, says a TransferWise spokesperson.

In the money transfer business, improving the scale creates a competitive advantage. "TransferWise will get a lower exchange rate on a higher dollar value transaction," says Lindsay Davis, fintech analyst at CB Insights. "Instead of pocketing this money, they pass it on to customers to reduce costs. It's a gap for them. "

With its borderless debit card account, TransferWise is getting closer and closer to providing traditional financial services, such as account verification. "They said they were not trying to replace the bank account, but by issuing a debit card, of course," Davis says. "They will go to a highly saturated market if they do it."

TransferWise has leveraged $ 397 million in funding since 2011. "We do not expect to have an IPO or other outings now," says a TransferWise spokesperson.